Why You Should Consider Timekeeping for Your Salaried Employees

The forty-hour work week came about in 1938 as a result of the Fair Labor Standards Act, which also established that hourly workers had to be paid a minimum wage and overtime. Hourly workers are required to use timekeeping systems to track their hours, whereas in many organizations, full-time salaried employees don’t track their time.

Is that the right choice? Should full-time salaried employees use timekeeping systems?

There’s an argument to be made that timekeeping is critical for every employee, even those exempt from the FLSA law. To illustrate this point, let’s look at an example.

Imagine a small, nonprofit organization that does community outreach support for women. Because nearly everyone in the organization is salaried, they’re technically FLSA exempt. As a result, staff initially didn’t clock in and out at all.

Most of the staff in this nonprofit were paid the same, but Lisa felt as though she constantly picked up the slack for her coworkers. She felt she continually came in early, did more, and even worked evenings from home to pick up slack.

The bosses knew Lisa was a good employee, but they had no way to verify whether or not she was covering for other people until they implemented a timekeeping system.

When the organization required everyone to track their hours (even salaried folks), they were able to see that Lisa truly was doing more than her fair share.

Tracking your employees’ hours, even if they’re FLSA exempt, provides information that allows you to judge whether they’re pulling their weight or are overworked.

Tracking the Overworked Employee

Timekeeping addresses the need to make the employee or systems more efficient. If the employee is overworked, perhaps the position should be split between two people.

If an employee is doing great work but is putting in sixty or seventy hours a week to get it done, without a timekeeping system in place, you may not notice how overworked she is until she leaves your organization. Timekeeping provides insight into labor costs for hourly employees and work production related to time for salaried employees.

In an HR role, this information allows you to determine if you need to add staff or if a particular employee needs to take some time off. Often, it’s the HR team members themselves who could benefit from this type of insight into their work routines.

HR staff are usually overwhelmed with work, care deeply about the company, and work far too many hours in stressful, deadline-driven environments.

Since they’re often FLSA exempt, their long hours aren’t always obvious to executives. Attempting to keep that pace up can eventually breed resentment and unrest.

Finding the Underworked Employee

It’s just as possible to find an underworked employee as it is to find an overworked one. If one of your employees earns a salary but comes in late, takes long lunches, and leaves early, that’s actionable information you want to know about.

Even if you don’t care about hours as long as the job gets done, timekeeping reveals his job is one that can be done quickly. This information is useful when determining the employee’s compensation and advertising for future positions.

Timekeeping can also be useful to identify trends in your market or organization, which is another helpful bit of information relating to forecasting and future planning.

If your organization has a huge amount of work flow in around December and January, without timekeeping in place, you may have trouble quantifying this trend and just think you’re working all day, every day, forever—which can be what it feels like!

However, if you utilize a timekeeping system, you can understand and plan for the time and labor commitment you’ll need to handle future busy seasons.

Company-Wide Timekeeping Might Not Be Popular

Convincing everyone to clock in is a hard sell, but it sets a strong example.

Employees working hourly often wonder if the salaried personnel put in as many hours as they do. It can be difficult for managers to enforce timekeeping when they haven’t done it themselves. Because it shows the time spent by each employee, tracking hours in the upper ranks is an effective way to boost morale and transparency.

Implementing this practice in a company is no easy task. In tenured organizations, staff have likely been salaried for years and work all hours of the night.

Any kind of timekeeping system you put in place needs to be flexible enough to handle a variety of situations—a step that requires patience and understanding.

It may have been twenty years since a staff member has ever physically clocked in and out, so you will likely get pushback when it comes time for implementation.

However, if the policy is company-wide—that is, from the CEO down—employees are more likely to understand the change is about unifying HR systems for long-term company benefit, not about catching them doing something wrong.

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About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the seniors insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers, and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources, and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.